Assessing “National Strategy” in North and South Korearhetoric urged the repudiation of “the...

ABSTRACTS 257

Assessing “National Strategy” in North and South Korea

Nicholas Eberstadt

This paper examines the extent to which the domestic and external policies of the two Koreas can be described in terms of “national strategy.” Though “national strategy” remains a problematic construct for a variety of theoretical and practical reasons, this study attempts to deploy it to describe the evolving economic, military, and security policies of the Democratic People’s Repub- lic of Korea and the Republic of Korea from the partition of the Korean peninsula in 1945 to the present.

The paper proceeds through four sections. The first introduces and frames the problem. The second section examines, and attempts to describe, the “national strategy” of the DPRK. The third section does the same for the ROK’s post-partition “national strategies.” The final section reviews and assesses some of the findings, and speculates about the challenges that may face national strategy in North and South Korea in the years ahead.

NICHOLAS EBERSTADT 55

Assessing “National Strategy” in North and South Korea

Nicholas Eberstadt

Both states on the divided Korean peninsula have sometimes been judged exemplars of “national strategy”: i.e., a considered long-range design for achieving key domestic and international objectives while contending with circumstantial risks and opportunities. These “national strategies” have resulted at various junctures in striking successes, and admirers (grudging or otherwise) of the two Korean approaches may be found among students of the diverse disciplines that bear upon “national strategy.”

Before proceeding further, two caveats are in order. First, a method- ological warning: defining and evaluating any country’s “national strategy” is, inescapably, a highly subjective undertaking. Divining the presumed purpose that animates observable behavior is a difficult task made no easier when a multiplicity of sometimes contradictory actors represent the entity under observation. Assessing the soundness of any strategy is to build a chain of assumptions between intention, action, and result. Even when those assumptions are valid, the verdict may be problematic: “bad” strategies sometimes succeed and “good” strategies fail. In the end, the questions of greatest interest may be objectively unanswerable-or impossible to frame in testable (falsifiable) fashion.

The second caveat is country specific. As a concept, “national strategy” is actually quite a new arrival to the ancient land of Korea. While it was a unified and autonomous state, imperial Korea under the Yi Dynasty (1392-1910) lacked an international strategy because it simply did not desire one. Quite the contrary: a succession of rulers strove, to

56 THE KOREAN JOURNAL OF DEFENSE ANALYSIS

the maximum degree feasible, to avoid contact with foreigners and their governments altogether. In the early decades of the twentieth century, Korea did become deeply involved in a “national strategy”-but not its own. Annexed by Japan in 1910 and administered thereafter as a colonial territory, the Korean land and its people were fully incorporated into Tokyo’s interwar quest to augment Japanese power, prosperity, and security.’ The possibility of a Korean “national strategy” therefore did not reveal itself until August 1945, with Japan’s unconditional surrender and liquidation of her empire.

The fateful, almost off-handed partition of the Korean peninsula into temporary Soviet and American “zones” hardened into political divi- sio’n, with a Soviet-style system entrenched in the north, and a US- supported state consolidating in the south. Thus, by a cruel accident of history, Korea went directly from having no “national strategy” of its own, to needing two. The purpose of this interpretive historical essay is to uncover the long-term strategic designs of these two antagonists.

North Korea’s “National Strategy’’

If ever there were a likely candidate for having crafted and executed a “national strategy,” it would be the Democratic People’s Republic of Korea (DPRK). In North Korea, top-down decisionmaking in all realms of policy is a reality, not just an ideal. In Kim I1 Sung, moreover, North Korea had a single supreme political personality from the state’s 1948 founding until the great leader’s own death in 1994. Yet as any North Korea watcher can attest, assaying North Korean policy-much less strategy-is a frustrating and uncertain business. Given the regime’s extraordinary secrecy, hard data-even pedestrian facts-remain amaz- ingly scarce.

Despite these limits, it is fair to speak of a North Korean “national strategy”-one which, moreover, existed from the DPRK’s very inception. This “national strategy” can be succinctly described as follows:

1 For one reading of that “national strategy,” see Michael A. Barnhart, Japan Prepares f o r Total War: The Search f o r Economic Security, 1919-1941 (Ithaca: Cornell University Press, 1987).


( 1 ) The paramount external objective of the regime is unification with southern Korea on the DPRK’s terms. The Korean peninsula must be a single and national entity, organized under socialist principles, and governed by the Korean Workers’ Party (KWP).

(2) Both South Korea’s regime (the Republic of Korea, or ROK) and its society are weak, divided, and corrupt-inherently unstable, and incapable of withstanding external pressure. The ROK may collapse under its own weight, or it may require an outside push. Either way, a strong North Korean military will be needed: to step in to assist with unification at just the right moment.

Such a strategy can easily be read into North Korea’s conduct in the DPRK’s earliest years. In 1948 and 1949, Pyongyang’s inter-Korean rhetoric urged the repudiation of “the illegitimate Syngman Rhee clique”; its operatives and associates in the South strove to put these words to action. As the South Korean system proved resilient, North Korea’s leadership prepared to overwhelm the ROK with superior military force. These preparations resulted in the surprise attack against South Korea in June 1950, which launched the Korean War.2

For the DPRK, the Korean War proved a disastrous miscalculation. South Korea did not burst with a single bayonet thrust, for to Pyongyang’s surprise and dismay, the United States (and the United Nations) rushed to Seoul’s defense. As many as four million persons may have been killed over the war’s three years of fighting, many of them DPRK civilians. North Korea was all but flattened by enemy firepower. The North Korean regime, moreover, was very nearly over- turned itself-had not Mao come to Kim I1 Sung’s rescue in October 1950, the DPRK likely would have been doomed.

But the record of subsequent events suggests that the DPRK did not fundamentally alter its “national strategy” in the wake of this calamity. That is not to say that North Korean policies and tactics remained fixed and frozen. They adapted to shifting circumstance. Pyongyang’s almost single-minded strategic obsession with reunifying the peninsula on the

2 For an excellent account of this period, see John Merrill, Korea: The Peninsular Origins of the War (Newark, DE: University of Delaware Press, 1989).


DPRK’s own terms, moreover, was consistent with, and indeed required, the simultaneous pursuit of a fairly complex array of policies, some of which had no direct or immediate bearing on the putative objects of Pyongyang’s strategic attention.

Pyongyang’s post-war “national strategy” has unfolded in three phases, described briefly below.

1953-1962: Gaining “Breathing Space,” Gathering Strength

For the decade after the Korean War, North Korea concentrated upon the reconstruction and development of its devastated domestic economy. With America’s dramatically renewed security commitment to the ROK, and the seeming stability of the South Korean polity (through the 1950s, anyway), reunification on Pyongyang’s terms was not a viable short-run option. As they bided their time, North Korea’s leaders strove to strengthen their home power base-both ideologically and materially.

Shortly after the Panmunjom ceasefire, the DPRK vigorously re- sumed its unfinished “socialist transformation.” First, the nationalization of the country’s industries and enterprises was completed. Thereafter, the country’s farms were quickly turned into socialist cooperatives. In other Communist countries, such overhauls often caused output to plummet, at least temporarily. Not so, apparently, in North Korea. Even discounting inflated official claims, the growth of output between 1953 and 1962 looks to have been very rapid and fairly steady. Prewar levels of production may have been reattained by 1955 or 1956; in the following six or seven years, total output may have even d ~ u b l e d . ~ As in the Japanese colonial era, North Korean leadership now heavily favored producer goods over consumer goods; the former, of course, being imperative for fighting and winning wars.

North Korea’s international policy played a pivotal role in the country’s economy. North Korea secured concessional aid (grants and loans) from virtually the entire socialist camp of the 1950s: China, the

3 For obvious reasons, quantifying the DPRK’s economic performance is a problematic task. One of the best efforts to date is Fujio Goto, “Indexes of North Korean Industrial Output 1944-1975.” KSU Economic and Business Review (Kyoto), No. 9, 1982.


USSR, and Warsaw Pact Europe. In addition, China agreed to leave a huge troop presence in North Korea: thereby both relieving Pyongyang of burdensome military expenditures and providing a pool of manpower for local construction projects.

Kim I1 Sung’s doctrine of juche (usually translated as “self-reliance”) was expounded in 1955. These international arrangements illustrated juche in action: in essence, it was a complete inversion of the Yi Dynasty’s doctrine of ~ a d a e . ~ There would be no bowing to the great powers with which Pyongyang had to contend. Instead, tribute (in the form of more-or-less permanent flows of concessional aid) would be exacted from them!

The results of North Korea’s “national strategy” during this period were favorable and auspicious. Within the Korean peninsula itself, the balance of power was shifting in Pyongyang’s favor. During these years, North Korea was clearly winning its economic race with the South. Before partition, the north of Korea had been more productive (and more industrialized) than the south; that disparity looks to have been still greater by the early 1960s. No less important, all interested parties recognized that North Korea’s economic strides were greater.

1962-1 979: Going for Broke

In one respect, North Korea’s leadership found its own policies in the very early 1960s woefully wanting. In April 1960, South Korea’s President Rhee was driven from office by a collapse of his government in the face of student-led riots. He was replaced by a weak caretaker government that was eventually itself pushed from office a year later, this time by a military coup (led by General Park Chung Hee). During this period of political vulnerability in the South, Pyongyang failed to act. According to reports, Kim I1 Sung bitterly complained about this

4 As many as 200,000 in the mid-1950s. Chinese forces were finally withdrawn in 1958.

Sudue: “serving the great.” By no coincidence, one of the terms of greatest opprobrium in the North Korean lexicon is suduejuui-meaning “sudue-ism,” but officially translated as “flunkey ism.”

5


failure after the moment of opportunity had passed, and decreed that North Korea never be caught flat-footed again.‘

Between roughly 1962 and 1979, North Korea’s “national strategy” involved a careful and systematic placing of long-term bets that would pay off if the opportunity to reunify the peninsula on its own terms should come by again. In many respects, this was the period of greatest innovation and flexibility in North Korea’s external policies. Pyongyang’s distinctive approach to international relations, often alarm- ing or exasperating to ally and opponent alike, for the most part skillfully protected and advanced national interests as defined by the country’s leadership. By the end of this period, however, it had become grimly evident that none of these many gambles had actually worked.

Throughout the 1960s and the 1970s, North Korea established military buildup as a primary objective of state policy. The results were awesome. In the early 1960s, the Korean People’s Army (KPA) is thought to have numbered just over 300,000. By the late 1970s their armed forces were approaching the million mark.7 Backing up this rapidly expanding army was an entire range of war industries, the cumulative purpose of which was, of course, to put Pyongyang in a position to seize the hoped-for opportunity.

As the 1960s and 1970s progressed, prospects by some measures were surely encouraging. The Vietnam debacle; the “Nixon Doctrine”; the Carter administration’s announcement that Washington would withdraw all US troops from South Korea: these and other events could reasonably be read as presaging the end of an era in the US-ROK relationship. But as was to become increasingly clear, North Korea’s “national strategy” was a race against time. Just as spiraling military commitments (and the limits of stringent command planning) began to slow the pace of material advance in the North, the South entered into a phase of explosively rapid economic growth. Unexpected problems in

6 For these rumors, see Robert A. Scalapino and Chong-sik Lee, Communism in Korea (Berkeley, CA: University of California Press, 1973), p. 983.

For estimates of the growth of North Korean military manpower, see Nicholas Eberstadt and Judith Banister, “Military Buildup in the DPRK: Some New Indications from North Korean Data,” Asian Survey, November 1991.

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Pyongyang’s relations with its main allies, Moscow and Beijing, further limited the regime’s political and financial support. Given such trends, Pyongyang would not be stronger than Seoul indefinitely.

North Korea’s tactical response was quite imaginative. Beginning in the mid-l960s, the DPRK started to cultivate diplomatic relations with non-Communist countries: first “nonaligned states,” then Western (OECD) governments. In 1970, furthermore, North Korean foreign economic policy made a sharp turn toward Western markets for goods and capital. Between 1970 and 1975 Pyongyang contracted over $1.2 billion in hard currency loans, which it used for purchases of turn-key factories, other capital goods, and grain from OECD countries. In 1964, over 90 percent of North Korea’s trade turnover was with the Commu- nist bloc; by 1974, its import from OECD countries exceeded its imports from China, the Soviet Union, and Eastern Europe combined.*

These tactical thrusts, however, could not be sustained. Almost immediately, North Korea fell into arrearage on its hard currency debts; as it moved toward default its commerce with OECD countries collapsed, and trade relations with the industrial democfacies were further poisoned by Pyongyang’s continuing refusal to make good on the loans. By the same token, the overture toward non-Communist countries proved to be self-limiting, as Pyongyang’s new diplomatic acquaint- ances became familiar with North Korean habits (e.g. “self-financing” embassies supported by trafficking contraband; unpredictable payment for contracted merchandise) or-in the case of some “nonaligned” states-learned that the DPRK was a niggardly and unreliable dispenser of foreign aid.

Unorthodox as North Korea’s “national strategy” may have been during these years, its reading of the international scene that informed it was basically sound; arguably even prescient, in light of impending US foreign policy reversals and political weakness in the ROK. But at bottom this “national strategy” was a gamble, and here the DPRK proved unlucky. In the mid 1970s-when the North had likely gained a

8 For estimates, see Soo-young Choi, “Foreign Trade of North Korea, 1946-1988: Structure and Performance,” unpublished PhD dissertation, Northeastern Univer- sity, 1991.


decisive conventional edge over the South’s forces and Washington’s commitment to Seoul seemed to be shaky-President Park’s martial law regime still looked solid. And in 1979-when the DPRK probably still enjoyed a military advantage over the ROK and the Park assassination brought turmoil to the surface in the South-the US categorically reaffirmed its commitment to South Korea’s defense. North Korea’s “national strategy” had missed its run, and North Korean leaders entered the 1980s grimly playing out a hand of bad cards they themselves had chosen.

1980-1996: Dead End, No Exit

At the start of the 1980s, North Korea’s “national strategy” was at best a long shot. By the start of the 199Os, it sounded like a hopeless fantasy. Yet both the objectives of “national strategy’’ and the instruments for achieving it remained much as they had been in the 1940s, when that strategy had first been cast. Poorly adapted as it was for the world of the 1980s and 1990s, North Korean leadership nevertheless clung to it doggedly.

As the 1980s progressed, South Korea looked ever less vulnerable to an enforced unification with the North. Across the board, the South built upon strengths: by the beginning of the 1980s, the ROK had not only overtaken the DPRK economically but left it in the dust; in 1987, Seoul held the first more-or-less open and competitive national election in Korean history, a milestone in its ongoing transition away from quasi- police state and toward constitutional governance; and the successful 1988 Seoul Olympics debunked the notion of the ROK as an international pariah. All the while, the Reagan administration reduced what- ever doubts remained about the firmness of the US defense guarantee to Seoul.

North Korea’s response to these menacing changes was to continue, and intensify, the basic policies it had embraced in the 1960s and 1970s. Military buildup proceeded at full throttle; by 1987, some 1.25 million men or more may have been under The costs of this commitment,

9 Eberstadt and Banister.


however, were becoming too great for the DPRK’s relatively small economy to bear. By the mid- 1980s, according to Soviet-bloc observers, the North Korean economy had entered into stagnation, and was heading toward absolute decline.”

Unlike military counterparts in the USSR who saw a need in the 1980s for far-reaching economic reforms, Marshal Kim I1 Sung for- swore virtually any alterations in its entrenched, cumbersome and somewhat irrational central economic planning system. New directions, to be sure, were indicated from time to time, but these were half-hearted initiatives, with no practical design for achieving their stated goals. This left North Korea in the grip of a dilemma: without radical economic reform, it would be unable to compete with South Korea; yet with such reform, the North Korean leadership’s direct control over economy, society, and populace would diminish.

Pyongyang attempted to circumvent this dilemma through a foreign policy finesse with the Soviet Union. In the early 1980s Moscow was eager for new security ties; Pyongyang was willing to lean sharply toward Moscow in return for substantial economic and military assistance. On this basis, the two parties entered into a new arrangement that resulted in an implicit Soviet subsidy exceeding $4 billion for the 1985-1990 period and military transfers to the DPRK during those years amounting to over $5 billion.” North Korean leaders thus failed to repair the fundamental flaws in their “national strategy” in the 1980s and instead, through successful diplomacy, postponed their day of reckoning. But that day arrived. In 1990, President and CPSU General Secretary Mikhail Gorbachev extended Soviet diplomatic recognition to

10

11

See, for example, Hans Maretzki, Kimismus in Nordkorea: Analyse des lezten DDR-Botschafters in Pyoengyang [Kim-ism in North Korea: Analysis of the last GDR Ambassador to Pyongyang], (Boeblingen, Germany: Anita Tykve Verlag, 1991), and Marina Trigubenko, “Industrial Policy in the DPRK,” paper presented to the KDI-Korea Economic Daily conference on the North Korean economy, September 30 - October 1, 1991.

These estimates are based upon analysis of officially reported Soviet trade data. For more details, see Nicholas Eberstadt, Marc Rubin, and Albina Tretyakova, “The Collapse of Soviet and Russian Trade with the DPRK, 1989-1993: Impact and Implications,” Korean Journal of National Reunification, Vol. 4 (1995).


the ROK; a few months later Moscow insisted on hard currency terms of settlement in its trade with North Korea; a few months after that, the USSR itself disappeared from the world stage. SovietIRussian military shipments to the DPRK all but ceased; trade turnover between Moscow and Pyongyang collapsed, and the implicit economic subsidy to the North Korean economy abruptly plummeted.’*

Deprived of aid from and trade with the Warsaw Pact countries, the North Korean economy suddenly headed from stagnation or decline into a deep slump. At the same time, North Korea faltered on the international stage. North Korea was no longer able to block South Korea’s entry to the United Nations (they both joined in 1991);13 in 1992, North Korea’s last ally of any consequence, China, normalized its relations with the ROK. Even Beijing evidenced growing impatience with North Korea’s situation: between 1991 and 1994, the Chinese dramatically and steadily reined in their subsidy to the DPRK.I4

By 1993 North Korea was a country without a “national strategy.” To be slightly more precise: it had a national strategy-the same one it always had-but this was almost completely irrelevant to the problems at hand. The pressing problem at hand was regime survival. Pyongyang’s approach to the regime survival problem was almost entirely tactical, and revealed a striking admixture of painful temporiz- ing and bold maneuver.

On the one hand, the North Korean leadership resolutely refused to experiment with any serious economic reforms. Kim Jong-il’s writings evidence, if anything, even less enthusiasm for liberalized economic policies than those of his father. North Korea’s current ability to earn hard currency is extremely limited-sales of minerals and raw materials, textiles and clothing, munitions and other hard currency goods may

12 For more information, see ibid.

13 The DPRK joined at the same time. But this was a face-saving retreat from its position that Korea should only have its one true representative accepted into that forum.

14 For more details, see Nicholas Eberstadt et al., “China’s Trade with the DPRK, 1990-1994: Pyongyang’s Thrifty New Patron,” Korean and World Affairs, Vol. 19, No. 4 (1995/96).


generate a billion dollars a year in exports-and its ability simply to maintain production levels without outside help is an open question. On its current trajectory, continuing economic deterioration seems to be the most likely prospect-one presumably less unsettling to North Kor,ean leadership than the vision of far-reaching systemic reforms.

On the other hand, North Korea made a series of shrewd and daring moves in the diplomatic arena. By threatening in 1993 to withdraw from the Nuclear Nonproliferation Treaty (NPT), hinting that it might already have succeeded in developing an atomic bomb, and indicating that it would soon be capable of producing half a dozen or more nuclear devices each year, Pyongyang generated a wave of international alarm. Through successive rounds of negotiations with the United States, South Korea, Japan, the UN International Atomic Energy Agency, and other parties, the DPRK finally arrived at a complex and extended understanding with Washington (the 1994 “Agreed Framework”) whereby North Korea’s program for producing fissile materials would be put on hold (and, eventually, inspected and dismantled) in return for which an American-led consortium would provide ten years of heavy oil deliver- ies gratis as well as construct two “safe” nuclear reactors in the DPRK at the cost of an additional four billion dollars.

This understanding satisfied a multiplicity of North Korean goals. Perhaps most importantly, it seemed to promise that North Korea might be able to draw substantial, long-term concessional aid from three fresh new sources: Washington, Tokyo, and Seoul. Yet even this brilliant tactical success did not rescue North Korea from the menacing funda- mentals of its new situation-much less return the government to a position where it could pursue its long-cherished, but now inoperative, “national strategy.”

The “National Strategies” of South Korea

Although vastly more information is available about South Korea than North Korea, describing South Korean “national strategy” is by far the more difficult task. Even during its most autocratic phases, the Republic of Korea was a country with more than one center of power, more than one list of the key national objectives, and distinctly more than one accepted idea for how these key objectives might be achieved.


Moreover, the turnover of key decision-makers in politics, defense, diplomacy, public finance, and commerce, though not always regular, was nonetheless a predictable and sometimes very rapid phenomenon. l 5 To describe South Korean “national strategy” thus risks positing con- scious design, coherence, and continuity where none may exist.

Nevertheless, two general approaches to “national strategy” have been officially and successively embraced by the Republic of Korea since its founding in 1948. The first operated during the Presidency of Syngman Rhee. The second was developed under president Park Chung Hee, and has continued to be pursued-albeit with important modifica- tions-to the present day.

1948-1 960: Dependence and Survival

When Syngman Rhee assumed the presidency of the new Republic of Korea in 1948, the survivability of the state was very much in doubt. The partition of Korea had severely disrupted the economy of the South-which was already poor, agrarian, and densely populated. Americans (among others) had already concluded that South Korea was not, and would not be, economically viable. South Korea’s domestic scene was bitterly and violently divided into political factions. Militar- ily, the Republic of Korea Army (ROKA) was far weaker than the hostile KPA that i t faced. This vulnerable state, moreover, lacked assurance of the international support it might need to survive: with independence, all but a relative handful of the American troops sta- tioned in South Korea after World War I1 were withdrawn, and in Washington extreme reluctance to extend further financial or military assistance to the ROK was voiced both by Congress and within the administration.

As a consummate and ruthless politician, Rhee was both inclined and capable to resolve the “survivability” problem by all means within his power. Consolidating control over a weak and fragile state, however, was not enough to ensure South Korea’s survival. In the late 1940s,

15 Leading an early observer of post-partition South Korea to speak of “the politics of the vortex.” See Gregory Henderson, Korea, The Politics of the Vortex (Cambridge: Harvard University Press, 1968).


viability meant finding a reliable patron. Survival could only be achieved on a “client state” standing. That meant that between 1948 and 1960, Rhee’s “strategy” seems to have been directed toward forming indissoluble bonds with the only available patron, the United States government.16 In the late 1940s, forging those bonds looked to be a formidable challenge. North Korea’s 1950 attack, however, redefined the boundaries of America’s national interests: the Republic of Korea was thenceforth within that vital perimeter.

The attainment of “client state” status immediately relieved the fledgling South Korean state of its greatest threats: North Korean attack and economic collapse. As for domestic instability, Washington afforded the Rhee government the latitude to deal with troublesome electoral rivals more or less as it saw fit; at the same time, American largesse- and the government’s control of access thereto-permitted the creation of a coalition of “rent-seekers” that encompassed many of the most influential elements in the ~ociety.’~ As far as it went, this was a perfectly workable blueprint for regime survival for some time. Whether it amounted to a “national strategy” is another question. In two key respects, in fact, the Rhee approach may be said to have been critically flawed from the standpoint of overall strategy.

First, despite Rhee’s rhetoric in support of a reunified Korean nation, his own program presented absolutely no means by which to bring this cherished goal nearer to reality. The “March to the North,” so often promised in Rhee’s speeches, overlooked the simple fact that the KPA was considerably stronger than an unassisted ROKA. Furthermore, Rhee had no plan for reversing that imbalance. The only conceivable way in which a non-Communist Korean peninsula could have been created during this era would have been with American bayonets-and this was an unthinkable option for the American government.

16 For an excellent analysis of this “strategy,” see Jung-en Woo, Race to the Swift: State and Finance in Korean Industrialization (New York: Columbia University Press, 1991), esp. chap. 3.

17 Some of these latter arrangements are described in broad terms in Anne 0. Krueger, The Developmental Role of the Foreign Sector and Aid (Cambridge: Harvard University Press, 1979).


The second, and arguably more serious, flaw in the Rhee schema is that it neglected the imperative of bringing economic health-and economic growth-to South Korea. Political patronage mattered to him; economic productivity did not. Consequently, Rhee was content to pursue “aid-maximizing” policies,” even if these contributed to budgetary and financial disarray and hampered efforts to improve the country’s output levels and living standards. Under the harsh reality of the peninsula’s hostile division, failure to match North Korea’s economic growth presaged eventual failure to continue the competition. Despite American aid, per capita output in the South appeared to lag further and further behind the North as the 1950s wore on. By the time of the riots that brought Rhee down (April 1960),19 his approach to system survival had reached the limits of its usefulness.

1961-1 996: The Quest for Prosperity and Autonomy

The military coup of May 1961 brought a very different policy approach into force for South Korea. The components of this approach coalesced into what may fairly be described as a “national strategy.” The principal architect of this continuing strategy was General Park Chung Hee, initially head of the junta’s Supreme Council for National Reconstruc- tion (SCNR), and later president of the ROK.

Park summarized his strategic concerns shortly after the coup: “We [South Koreans] can’t depend on the United States forever.”2o In prin- ciple, there was a solution to this problem. To remedy South Korea’s perilous dependence, Park saw urgent necessity to creating a “rich nation and strong army,” as the famous formula from Japan’s Meiji

18

19

20

In the apt phrase of David C. Cole and Princeton N. Lyman. See their Korean Development: The Interplay of Politics and Economics (Cambridge: Harvard University Press, 1971), pp. 170-72.

A vivid account of this denouement can be found in Sungjoo Han, The Failure of Democracy in South Korea (Berkeley, CA: University of California Press, 1974), chap. 2.

US. News and World Report, November 20, 1961, cited in Joon Young Park, Korea’s Return lo Asia: South Korean Foreign Policy, 1965-1975 (Seoul: Jin Heong Press, 1985), p. 36.


period put it (fukoku kyohei). But South Korea’s particular, and delicate, international position would require more than simple augmentation of domestic power to assure its security. Diversifying and strengthening the ROK’s relations with other countries would simultaneously reduce Seoul’s dependence on Washington and improve South Korea’s position in its long-term contest with the DPRK.

These three objectives-achieving rapid economic growth; developing credible defense capabilities; and solidifying ties with the international community-informed and guided South Korean policy during the Park years, and thereafter. Pursuit of those objectives required regimens and structures adequate to the task. For the most part, these had to be constructed.

Within half a year of the military revolution, the major innovations in administrative machinery needed for supporting the new “national strategy” had been effected: a Korean Central Intelligence Agency (KCIA); an Economic Planning Board (EPB); and a Federation of Korean Industries (FKI). With these mechanisms in place, South Korean policy succeeded in sparking explosively rapid economic growth-and in maintaining this awesome tempo, virtually without interruption, for what has now been more than a generation.

Economists disagree over the precise components of this engineered “takeoff.” Nevertheless, it appears that an outward-looking (“export- oriented”) economic policy executed by a strongly dirigiste government provided a powerful stimulus: at first, for utilizing stocks of productive knowledge and pools of labor that had gone unapplied under the previous regimen; later, for shaping a climate in which the high investment ratios needed for very rapid material advance and structural transformation might be profitably achieved and sustained. On the other hand, the new economic regimen included a number of policies whose predictable result were to increase costs, diminish efficiency, and reduce the pace of growth2’ What South Korea’s economic performance suggests, however, is that getting one big thing right can more than make up for getting many little things wrong.

21 For more detail, see Nicholas Eberstadt, Korea Approaches Reunification (Armonk, NY: M. E. Sharpe, 1995), chap. 1 .


As the Park government moved the country into rapid industrialization, i t also embarked on a sustained diplomatic offensive. Recognized by only 15 countries in 1960, twelve years later the Republic of Korea was recognized by 79. South Korea’s expanding international commerce helped create bonds of mutual interest between Seoul and otherwise distant governments. But Seoul also worked resolutely to entrench itself within a greater pro-Western alliance structure. In 1964, it dispatched troops to the Vietnam War. In 1965, it finally normalized relations with Japan. In 1966, it organized the (short-lived) Asian and Pacific Council. Just as export-led growth was diminishing Seoul’s financial dependence upon Washington, foreign policy was striving to build a web of international relationships that would both enhance the ROK’s security and increase its autonomy.

All in all, South Korea’s “national strategy” under Park worked well. Yet certain tensions arose. Some were generated by external shocks, such as the shifts in US foreign policy precipitated by Washington’s failure to win the Vietnam War. One of the Park government’s responses in the early 1970s was to develop the heavy industrial base needed for a domestic munitions capability.22 While successful to a point,2’ the “Heavy and Chemical Industries” (HCI) drive nonetheless led to struc- Qral distortions, buildup of foreign debt, and increased financial repression. Another undesirable consequence of the dirigiste directions of South Korea’s economic policies in the 1970s may have been increased political repression by the state, which in turn reduced Washington’s support for Seoul.

This problematik was temporarily resolved by two dramatic events: the 1979 assassination of President Park, and the 1980 election of Ronald Reagan to the presidency of the United States.

22 For an insider’s view, see Chong-yum Kim, Policymaking on the Front Lines: Memoirs of a Korean Practitioner, 1945-1979 (Washington, DC: World Bank, 1994), chap. 7.

23 As concluded, for example, by Joseph Stern et al., Industrialization and the State: The Korean Heavy and Chemical Industry Drive (Cambridge: Harvard University Press, 1995).


The military coup that followed Park’s death brought new leadership, advisers, and decisionmakers to power-by and large, persons without a personal stake in the policies enacted over the previous decade. Under a Reagan government, furthermore, American commitments to the ROK looked highly credible. Confidence in its new relationship with the US facilitated the relaxation of dirigiste economic policies.

With less call to subsidize priority industries for reasons of national security, financial repression correspondingly eased. Beginning in 1982, South Korea depositors enjoyed seven straight years of positive real interest rates on their bank accounts-the longest such run in the ROK’s history.24 South Korean personal savings, which had been unusually low for an NIC during the 1960s and 1970s, jumped from around ten percent at the beginning of the decade to over twenty percent near the decade’s end. This great rise in savings-along disciplined budgetary and realistic exchange rate policies-made for the ROK’s first multi-year balance of trade surplus (1987-1990) and dramatically reduced the ROK’s net foreign debt. It also allowed the ROK at last to finance the high investment ratios predicated by its rapid growth from domestic resources.

While the KCIA’s powers were curbed after Park’s assassination, nevertheless Chun Doo Hwan’s Fifth Republic government could still be called a quasi-police state. The regime, after all, had seized power through violence (later formalizing its seizure through ritualistic elections), and maintained its control through police practices unrestrained by any codified set of laws.2s This fact pointed to a profound challenge for South Korea’s “national strategy.” Under the Park-Chun framework, South Korea’s economic growth had been extraordinary, its defensive capabilities had greatly improved, and its international status had in- contestably strengthened. But the South Korean system had no reliable and regular mechanism for the peaceful transfer of political power.

24 Data from I1 Sakong, Korea in the World Economy (Washington, DC: Institute for International Economics, 1993), p. 212.

25 For a critical examination and review, see Yoon Dae-kyu, Law and Political Authority in South Korea (Boulder, CO: Westview Press, 1990).


In the late 198Os, the nature of the South Korean political system changed suddenly and radically. In a few critical months in 1987, under mounting pressure from demonstrations at home and cables form Washington, the Chun government acquiesced in an open and competitive mass presidential election. The drama was composed of design, accident and in the end, the candidate elected, former General Roh Tae Woo, possessed the twin virtues of being a close associate of the outgoing president and also having actually won more votes in the campaign than anyone else. With South Korea’s 1993 elections and the victory of former opposition leader Kim Young Sam, the transition to open elections, civilian rule, and largely accountable governance was completed, and firmly established. Yet while fundamentally altering the tenor of South Korean politics, this transition did not basically alter South Korea’s “national strategy.” The goals-and many of the policies-remained the same.

A final and momentous emendation in South Korea’s post-1961 “national strategy” should be mentioned-one made possible in part by the domestic political transformation noted above. This was the so- called Nordpolitik dipl~macy,~’ enunciated by President Roh Tae Woo just weeks before the 1988 Olympiad convened in It took note of developments in the 1980s in the Communist world-under Deng in China, Gorbachev in the Soviet Union, and some smaller states in Eastern Europe. Now that South Korea was no longer an “anti- Communist dictatorship,” the formulators of Nordpolitik reasoned, programmatic hostility between Seoul and these states was no longer a predetermined outcome. Through economic, cultural, and diplomatic initiatives, the ROK might be able to build working relationships-or

26 For one interpretation, see Nicholas Eberstadt, “Taiwan and South Korea: The ‘Democratization’ of Outlier States,” World Affairs, Vol. 155 (1 992).

27 I.e., “Northern Policy”-deliberately choosing the German words for official communiques, for the intended analogy to Ostpolitik.

28 For an exposition of this policy by a scholar, and sometime government official, who had been involved in it, see Kim Hak-joon, “The Republic of Korea’s Northern Policy: Origin, Development, and Prospects,” Japan Review of International Affairs, Vol. 5 (1991), special issue.


better-these longtime enemies. By doing so, the ROK would directly enhance its international security, and would furthermore bring consid- erable pressure upon Pyongyang to seek a working relationship of its own with Seoul.

Nordpolitik was a tremendous-though not a total-success. Within two years of its formal inception, South Korea had normalized, or agreed to normalize, relations with seven Communist countries. Thus Nordpolitik paid off even before the final crisis of Soviet communism. Formal diplomatic relations with China took another two years to cement; in the interim, China and the ROK enjoyed a booming com- mercial relationship which continues to this day.29 In 1991, the ROK at last joined the United Nations. At much the same time, reflecting newfound confidence in its security situation, Seoul announced that American nuclear weapons had been removed from its territory and invited Pyongyang to enter into sustained diplomatic and economic engagement. Despite some promising initial steps, however, Seoul has to date failed to elicit anything like sustained diplomatic and economic engagement with Pyongyang.

In March 1995, the Republic of Korea officially requested member- ship in the Organization for Economic Cooperation and Development (OECD). This rite of passage underscored the great successes of the previous three decades of South Korean “national strategy.” From near-India levels of poverty in the early 1960s, the ROK had lifted itself to near-Western levels of affluence by the 1990s. South Korea had in fact become one of the world’s dozen largest economies, and one of the dozen largest trading countries. Survival in the face of external danger was no longer a pressing question. The country had developed its own extensive network of international relations and enjoyed a generally positive international reputation. In the long contest with the North, finally, the Republic of Korea looked increasingly likely to emerge as

29 In 1994, new South Korean direct foreign investment (DFI) in China reportedly approached $1.7 billion. China reportedly has more South Korean DFI than any other country. Bilateral trade turnover in 1995, for its part, is anticipated to exceed $15 billion; each country is the other’s sixth-largest trade partner. See FBIS: East Asia Daily Report, March 17, 1995, p. 51, and August 22, 1995, p. 29.


the government that would eventually inherit authority over the entire Korean peninsula.

Concluding Comments and Observations

What is striking in both the North Korean and the South Korean cases is the degree to which “national strategy” drew from familiar historical patterns. Like other Communist polities, the DPRK may have promised to bring the country under its thrall into an utterly new order. Yet North Korea’s “national strategy” is informed by-indeed obsessed by-the past. The overarching preoccupation with reunifying the Korean minjok, or race, may be genuinely and deeply felt-but these are emotions shaped by searing events in the past. The idea that immediate military power by itself can answer all strategic questions is an antiquated notion. The idea that a network of tributary relationship could support a hereditary dynasty from generation into generation also derives from the Korean past.

South Korea’s “national strategy,” too, drew on the historically familiar-perhaps a bit more than most South Koreans are yet comfort- able admitting. The administrative apparatus that Park Chung Hee erected in the early 1960s to elicit rapid modernization, for example, bore more than passing resemblance to the security and economic planning structures that had been in place in Korea during the era of war-economy colonialism. Perhaps this should not be surprising: in an earlier life, General Park had been Lieutenant Okamoto Minoru, officer in Imperial Japan’s Kwantung Army.

Yet there was a decisive difference here-not only of degree, but of kind. North Korea has become a prisoner of the past, and is today apparently incapable reconsidering its strategy or refocusing on real- time international realities. South Korea, on the other hand, did not let itself become permanently shackled by the war-economy legacy that it resurrected in the early stages of rapid economic growth. Over time, the South Korean economic system has become less dirigiste, and more open; “planning” became, increasingly, an indicative exercise. By the same token, the shift to competitive, mass-participation, civilian-led politics marks a turn away from all that is familiar in the Korean


political past. To note as much may simply be to observe that successful states and societies cope, and adapt, and that unsuccessful ones do not.

It may be too easy from our current vantage point to dismiss North Korea as an unsuccessful state with an unsuccessful “national strategy.” Thirty years ago a very different verdict on the “national strategies” of the two Koreas might have been rendered. For some years thereafter, moreover, the North Korean goal of enforcing a Socialist unification upon the South was no mere pipe dream. Yet one wonders: if the DPRK had succeeded with its “national strategy,” what then? The leadership’s strategic thinking apparently came to a full stop at this threshold. How a unified Socialist Korea would compete in the world arena-or in the world economy-is unclear. In the final analysis, North Korea did not have an effective formula for self-sustaining economic growth. For sustained international competition, a “national strategy” must encom- pass a regimen for self-sustaining economic growth. South Korea’s “national strategy” has done so; North Korea’s has not.

Looking toward the future, North Korea’s prospects are grim. Barring a radical overhaul of its “national strategy,” Pyongyang will be reduced to a tactical game of eking out renewed extensions of its lease on life for the foreseeable future. Even the most skillful “madman” diplomacy and the most successful aid negotiations can only maintain the regime on a “life-support” basis.

As for South Korea, its ringing successes to date should not obscure the very real challenges that lie ahead. Three of these-all bearing upon “national strategy” deserve particular mention. First, time-tested South Korean formula for rapid economic growth is approaching its end; it cannot be continued indefinitely. The arrangements that have fueled rapid growth--e.g., close chaebol-government cooperation, subsidized by artificially cheap credit, reinforced by a posture of economic nation- alism, and administered in the absence of any transparent or impartial rule of law”-cannot go on forever. Second, South Korea has yet to face up to the ambiguities now present in its relationship with the United

30 For a measured and penetrating criticism of those arrangements, see Cho Soon, The Dynamics of Korean Economic Development (Washington: Institute for International Economics, 1994).

76 THE KOREAN JOURNAL O F DEFENSE ANALYSIS

States. Just what sort of international security arrangements are appro- priate for a country of forty-four million people with a $400 billion GDP bordering a hostile state with twenty-two million people and a GDP (according to Seoul) of about $20 billion?

Finally, South Korea’s “national strategy” today appears to lack any positive approach to the problem of Korean reunification. Pressed in private, many leading figures in South Korea simply express the hope that the issue can be deferred into the distant future. The genesis of this “ostrich policy” is easy enough to trace. For many decades, unification on South Korea’s terms was not a realistic option; after the German unification, South Koreans were shocked by the enormity of the fiscal transfers Western Germany was obliged to underwrite in the effort to reconstruct the former GDR. Some South Koreans may further believe that devising a practical reunification strategy would constitute a cusus belli in the eyes of Pyongyang.

Whether South Korea’s security position is improved by neglecting this central strategic question, however, may be doubted. It is true that Germany’s unification took place after the Federal Republic had more or less given up hope of an imminent reunification-and that, despite a lack of preparations, unity was achieved in a bloodless, happy, almost simple drama. But as we know, not all peoples are so lucky.

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